Yahoo's new email reader is now in public beta [previous review]. It doesn't take very much time with it to come to a simple conclusion: It is a fantastic email application. I found using it nearly indistinguishable from working with a dedicated email application. There's a preview pane. Messages can be dragged and dropped between folders. Right-clicking the mouse does mail-specific things instead of performing browser actions. And there's no longer any concept of paging through your inbox: You can see all your messages, no matter how many there are, in one big scrolling list. The interface is a bit slower than running an email app on a PC, but not much.
Yahoo Mail Beta also has an RSS reader built into it. It pre-populates your feeds from your My Yahoo page (which is likely both the world's most used and most under-appreciated RSS reader) and gives you an alternate way to view your feeds. Some people like reading RSS feeds in email and some don't; with My Yahoo and Yahoo Mail Beta you can easily go back and forth.
There are Contacts and Calendar buttons on Mail, but only Contacts is truly integrated with Mail. The interface is the same, and you can right-click on a contact to begin an email to them. There's no similar function to create an appointment with them, though, and when you click on the calendar icon in the main Mail navigation pane, it opens a new window to Yahoo's existing Calendar application.
I was not impressed with Yahoo's spam filters. When I fired up my Yahoo Mail this morning, about 50% of my junk mail was filtered out; the rest was still in my inbox. On the other hand, Yahoo does run a virus scan automatically before you attempt to download an email attachment.
Yahoo Mail feels like a direct competitor to email-reading software like Outlook or Eudora. It's free, it's fast, and if you're accustomed to using other email applications your learning curve will be very brief. But there's another school of email, which Google leads. Gmail is a fundamentally different beast. It does smarter things with email, like grouping messages in a conversation together, and converting some types of attachments (like PDFs) into HTML for you. It also gives you more space to store your mail. Google doesn't do its thing as prettily as Yahoo does, but it does some things better.